Unassociated Document


    GSV,
      INC.

    


    AMENDED
      AND RESTATED CONVERTIBLE PROMISSORY NOTE

     

    THE
      SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF
      OR IN RESPECT OF INTEREST PAYMENTS HEREUNDER HAVE NOT BEEN REGISTERED UNDER
      THE
      UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
      AND MAY NOT BE SOLD OR OTHERWISE DISTRIBUTED WITHOUT AN EFFECTIVE REGISTRATION
      STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO
      THE
      ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND
      LAWS.

     

     

    
      
        	$200,000	As of May 10,
                2008


      
 

     

    FOR
      VALUE
      RECEIVED, GSV, INC., a Delaware corporation (“Company"), with its principal
      office at 191 West Post Road, Westport, Connecticut 06880, hereby promises
      to
      pay to the order of D. EMERALD INVESTMENTS LTD., an Israeli corporation
      ("Holder"), with its principal office at 85 Medinat Ha-Yehudim Street,
      Herzeliya, Israel (the "Holder's Office"), or its assigns, on July 10, 2009
      (the
      "Maturity Date"), the principal amount of TWO HUNDRED THOUSAND DOLLARS
      ($200,000) (the “Principal Amount”), in such coin or currency of the United
      States of America as at the time of payment shall be legal tender for the
      payment of public or private debts, together with interest on the unpaid balance
      of said Principal Amount from time to time outstanding at the rate of eight
      percent (8%) per annum ("Contract Interest"). Accrued Contract Interest shall
      be
      payable quarterly in arrears on the last day of each calendar quarter commencing
      on May 31, 2008, and on the Maturity Date (the “Interest Payment Dates”). Unless
      the Note has been converted by the Holder prior to the Maturity Date pursuant
      to
      the terms of this Note, the unpaid Principal Amount, together with the then
      accrued unpaid Contract Interest and all other amounts owed hereunder, shall
      be
      due and payable on the Maturity Date. At the Holder’s option, Contract Interest
      shall be payable either in cash or in shares of common stock, $.001 par value
      per share, of the Company (“Common Stock”) (the number of shares to be
      calculated as set forth below). If the Holder elects to receive any Contract
      Interest payment in the form of shares of the Company’s Common Stock, the Holder
      shall given the Company notice of such election at least fifteen (15) business
      days prior to the applicable interest Payment Date. The number of shares of
      Common Stock to be issued to the Holder shall be calculated by dividing the
      amount of Contract Interest payable for the applicable period by the Conversion
      Price (as defined below). Payment of the Principal Amount and Contract Interest
      hereunder shall be made by wire transfer of immediately available good funds,
      to
      such bank account as the Holder may designate by notice to the Company prior
      to
      any such payment, or, with respect to Contract Interest that the Holder has
      elected to receive in shares of Common Stock, by delivery of share certificates
      of Common Stock to the Holder at the Holder's Office, or at such other place
      as
      the Holder , by notice to the Company, may designate from time to time for
      that
      purpose.

     

    In
      the
      event that the outstanding Principal Amount and all accrued and unpaid Contract
      Interest are not paid in full on or before the Maturity Date, then the
      outstanding Principal Amount and all accrued and unpaid Contract Interest
      thereon shall thereafter bear a default interest ("Default Interest") at a
      rate
      per annum equal to twelve percent (12%)
      until the outstanding Principal Amount and all accrued and unpaid Contract
      Interest and Default Interest thereon shall have been paid in full by the
      Company to the Holder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    This
      Note
      is subject to prepayment in whole or in part at any time and from time to time
      without penalty or premium, but with Contract Interest on the amount prepaid
      to
      the date of prepayment. All prepayments will first be applied to the repayment
      of accrued fees and expenses, then to Default Interest accrued on this Note
      through the date of such prepayment until all then outstanding accrued Default
      Interest has been paid, then to Contract Interest accrued on this Note through
      the date of such prepayment until all then outstanding accrued Contract Interest
      has been paid, and then shall be applied to the repayment of the Principal
      Amount.

     

    1.    Default.

     

    1.1.   Events
      of Default.
      Upon
      the occurrence of any of the following events (herein "Events of
      Default"):

     

    (i)    The
      Company shall fail to pay the Principal Amount on the Maturity Date or any
      Contract Interest payment on the due date thereof;

     

    (ii)    (A) The
      Company shall commence any proceeding or other action relating to it in
      bankruptcy or seek reorganization, arrangement, readjustment of its debts,
      receivership, dissolution, liquidation, winding-up, composition or any other
      relief under any bankruptcy law, or under any other insolvency, reorganization,
      liquidation, dissolution, arrangement, composition, readjustment of debt or
      any
      other similar act or law, of any jurisdiction, domestic or foreign, now or
      hereafter existing; or (B) the
      Company shall admit the material allegations of any petition or pleading in
      connection with any such proceeding; or (C) the
      Company shall apply for, or consent or acquiesce to, the appointment of a
      receiver, conservator, trustee or similar officer for it or for all or a
      substantial part of its property or admit generally an inability to pay its
      debts as they become due; or (D) the
      Company shall make a general assignment for the benefit of
      creditors;

     

    (iii)    (A) The
      commencement of any proceedings or the taking of any other action against the
      Company in bankruptcy or seeking reorganization, arrangement, readjustment
      of
      its debts, liquidation, dissolution, arrangement, composition, or any other
      relief under any bankruptcy law or any other similar act or law of any
      jurisdiction, domestic or foreign, now or hereafter existing and the continuance
      of any of such event for thirty (30) days undismissed, unbonded or undischarged;
      or (B) the
      appointment of a receiver, conservator, trustee or similar officer for the
      Company for any of its property and the continuance of any of such event for
      thirty (30) days undismissed, unbonded or undischarged; or (C) the
      issuance of a warrant of attachment, execution or similar process against any
      of
      the property of the Company and the continuance of such event for thirty (30)
      days undismissed, unbonded and undischarged;

     

    (iv)    Any
      of
      the Company’s representations or warranties contained herein or in the Purchase
      Agreement (the “Purchase Agreement”) between the Company and the Holder or the
      Warrant to Purchase Stock (the “Warrant”) issued to the Holder, each such
      agreement dated the date hereof, is determined by a court of competent
      jurisdiction as false or misleading in any material respect; 

     

    (v)    The
      Company shall breach or fail to perform or observe any obligation, covenant,
      term, condition, provision or agreement of the Company contained in this Note,
      the Purchase Agreement or the Warrant, after giving effect to any applicable
      notice provisions and cure periods; provided, however, that with respect to
      a
      failure to comply with any of the provisions of Sections 2.2(a) and (c) of
      this
      Note, such failure is not remedied within twenty (20) days after the Company's
      receipt of written notice of same; or

     

    
      
         

      

      
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    (vi)    Failure
      of the Company to ensure that any conversion of this Note or any Contract
      Interest hereon properly requested by the Holder is effected by the
      Company;

     

    then,
      and
      in any such event, the Holder, at its option and without written notice to
      the
      Company, may declare the entire Principal Amount of this Note then outstanding
      together with any accrued unpaid Contract Interest thereon (payable either
      in
      cash or shares of Common Stock) and Default Interest (if applicable) immediately
      due and payable, and the same shall forthwith become immediately due and payable
      without presentment, demand, protest, or other notice of any kind, all of which
      are expressly waived, and exercise any and all other legal or equitable rights
      resulting therefrom. The Events of Default listed herein are solely for the
      purpose of protecting the interests of the Holder of this Note.

     

    1.2.    Non-Waiver
      and Other Remedies.
      No
      course of dealing, delay or omission on the part of the Holder of this Note
      in
      exercising any right hereunder shall operate as a waiver or otherwise prejudice
      the right of the Holder of this Note. Holder shall not be deemed to have waived
      any of its rights under this Note unless such waiver is in writing and signed
      by
      Holder. A waiver in writing by Holder on one occasion shall not be construed
      as
      a consent to or a waiver of any right or remedy on any future occasion. No
      remedy conferred hereby shall be exclusive of any other remedy referred to
      herein or now or hereafter available at law, in equity, by statute or
      otherwise.

     

    1.3.    Collection
      Costs; Attorney’s Fees.
      In the
      event this Note is turned over to an attorney for collection or the Holder
      otherwise seeks advice of an attorney in connection with the exercise of its
      rights hereunder upon the occurrence of an Event of Default, the Company agrees
      to pay all actual costs of collection, including reasonable attorney's fees
      and
      expenses and all out of pocket expenses incurred in connection with such
      collection efforts, which amounts may, at the Holder's option, be added to
      the
      Principal Amount hereof.

     

    2.    Obligation
      to Pay Principal and Interest; Covenants.
      No
      provision of this Note shall alter or impair the obligation of the Company,
      which is absolute and unconditional, to pay the Principal Amount of, Contract
      Interest and Default Interest, if applicable, on this Note at the place, at
      the
      respective times, at the rates, and in the currency or securities herein
      prescribed.

     

    2.1.    In
      no
      event shall the amount or rate of interest due and payable under this Note
      exceed the maximum amount or rate of interest allowed by applicable law and,
      in
      the event any such excess payment is made by Company or received by Holder,
      such
      excess sum shall be credited as a payment of Principal Amount (or if no
      Principal Amount remains outstanding, shall be refunded to the Company). It
      is
      the express intent hereof that the Company shall not pay and Holder not receive,
      directly or indirectly or in any other manner, interest in excess of that which
      may be lawfully paid under applicable law. All interest (including all charges,
      fees or other amounts deemed to be interest) which is paid or charged under
      this
      Note shall, to the maximum extent permitted by applicable law, be amortized,
      allocated and spread on a pro rata
      basis
      throughout the actual term of this Note.

     

    2.2.    Covenants.
      The
      Company covenants and agrees that, while this Note is outstanding, it
      shall:

     

    
      
         

      

      
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    (a)  Pay
      and
      discharge all taxes, assessments and governmental charges or levies imposed
      upon
      it or upon its income and profits, or upon any properties belonging to it before
      the same shall be in default; provided, however, that the Company shall not
      be
      required to pay any such tax, assessment, charge or levy that is being contested
      in good faith by proper proceedings and adequate reserves for the accrual of
      same are maintained if required by generally accepted accounting principles;
      

     

    (b)  Preserve
      its corporate existence and continue to engage in business of the same general
      type as conducted as of the date hereof;

     

    (c)  Comply
      in
      all respects with all statutes, laws, ordinances, orders, judgments, decrees,
      injunctions, rules, regulations, permits, licenses, authorizations and
      requirements ("Requirement(s)") of all governmental bodies, departments,
      commissions, boards, companies or associations insuring the premises, courts,
      authorities, officials, or officers, that are applicable to the Company; except
      when the failure to comply would not have a material adverse effect on the
      Company; provided that nothing contained herein shall prevent the Company from
      contesting in good faith the validity or the application of any
      Requirements.

     

    3.    Conversion.

     

    3.1.    Right
      to Convert.
      At any
      time prior to May 10, 2009, the Holder may, at its option, by written notice
      to
      the Company ("Conversion Notice"), elect to convert this Note and all accrued
      and unpaid Contract Interest thereon, in whole but not in part, into Common
      Stock at the price of $.70 per share of Common Stock (the "Conversion Price"),
      as adjusted to reflect stock dividends, stock splits, recapitalizations and
      the
      like pursuant to Section 3.3 below. 

     

    3.2.    Conversion
      Process.
      The
      Holder shall deliver to the Company the Conversion Notice in the form attached
      hereto as Exhibit A. Promptly after the receipt of such Conversion Notice,
      the
      Company shall issue and deliver to the Holder a certificate, registered in
      the
      name of the Holder, representing the number of shares of Common Stock to which
      the Holder is entitled upon such conversion.

     

    3.3.    Adjustments.

     

    (a)    Stock
      Dividends, Splits, Etc.
      If the
      outstanding shares of the Company's Common Stock shall be subdivided or split
      into a greater number of shares or a dividend in Common Stock shall be paid
      in
      respect of the outstanding Common Stock, the Conversion Price in effect
      immediately prior to such subdivision or at the record date of such dividend
      shall, simultaneously with the effectiveness of such subdivision or split or
      immediately after the record date of such dividend (as the case may be), be
      proportionately decreased. If the outstanding shares of Common Stock shall
      be
      combined or reverse-split into a smaller number of shares, the Conversion Price
      in effect immediately prior to such combination or reverse split shall,
      simultaneously with the effectiveness of such combination or reverse split,
      be
      proportionately increased. 

     

    (b)    Reclassification,
      Exchange or Substitution.
      Upon
      any reclassification, recapitalization, exchange, substitution, reorganization
      or other event that results in a change of the number and/or class of the Common
      Stock, lawful provision shall be made so that Holder shall be entitled
      thereafter to receive, upon conversion of this Note and/or any accrued Contract
      Interest hereon, the number and kind of securities and property that Holder
      would have been entitled to receive if the Principal Amount of and/or accrued
      Contract Interest, as the case may be, as to which conversion is requested,
      and
      as of the date conversion is requested, had been converted immediately before
      such reclassification, recapitalization, exchange, substitution, reorganization
      or other event. In any such case, appropriate adjustment (as reasonably
      determined by the Board of Directors of the Company) shall be made in the
      application of the provisions set forth herein with respect to the rights and
      interests thereafter of Holder such that the provisions set forth in this
      Section 3 (including provisions with respect to the Conversion Price) shall
      thereafter be applicable, as nearly as is reasonably practicable, in relation
      to
      any shares of stock or other securities or property thereafter deliverable
      upon
      the conversion of this Note and/or any accrued interest hereon. The provisions
      of this Section 3.3(b) shall similarly apply to successive reclassifications,
      recapitalizations, exchanges, substitutions, reorganizations or other
      events.

     

    
      
         

      

      
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    (c)    Adjustments
      for Diluting Issuances.
      If the
      Company shall issue, after the date of this Note, any Equity Securities (as
      defined below) at a price per share or conversion price or exercise price lower
      than the Conversion Price in effect immediately before such Equity Securities
      are issued, in all such cases the Conversion Price shall be adjusted to equal
      the price per share or the conversion price or the exercise price of such Equity
      Securities, as applicable. The foregoing shall not apply to issuance of common
      stock
      or
      preferred stock the
      proceeds
of
      which
      will be payable to the Company in immediately available funds upon issuance
      thereof.

     

    For
      purposes of this Note, the term “Equity Securities” shall mean any securities
      evidencing an ownership interest in the Company, or any securities having voting
      rights in the election of the Board of Directors of the Company not contingent
      upon default, or any securities convertible into or exercisable for any class
      of
      shares of the Company, or any agreement or commitment to issue any of the
      foregoing.

     

    (d)    Fractional
      Shares.
      No
      fractional shares shall be issuable upon conversion of this Note and/or any
      accrued Contract Interest hereon and the number of shares to be issued shall
      be
      rounded up to the nearest whole share.

     

    (e)    Certificate
      as to Adjustments.
      Upon
      each adjustment of the Conversion Price or number of shares, the Company at
      its
      expense, shall promptly compute such adjustment, and furnish the Holder with
      a
      certificate of its Chief Financial Officer setting forth such adjustment and
      the
      facts upon which such adjustment is based. The Company shall, upon written
      request, furnish the Holder with a certificate setting forth the new Conversion
      Price and/or number of shares of Common Stock or other securities and the series
      of adjustments leading thereto. 

     

    (f)    Price
      Adjustment.
      No
      adjustment in the Conversion Price shall be required unless such adjustment
      would require an increase or decrease in the Conversion Price of at least $0.01;
      provided, however, that any adjustments that by reason of this subsection are
      not required to be made shall be carried forward and taken into account in
      any
      subsequent adjustment. All calculations under this Section 3 shall be made
      to
      the nearest cent or to the nearest 1/100th of a share, as the case may
      be.

     

    3.4.    No
      Impairment.
      The
      Company shall not, by amendment of its Certificate of Incorporation, as amended,
      or through a reorganization, transfer of assets, consolidation, merger,
      dissolution, issue, or sale of securities or any other voluntary action, avoid
      or seek to avoid the observance or performance of any of the terms to be
      observed or performed under this Note by the Company, but shall at all times
      in
      good faith assist in carrying out of all the provisions of this Section 3 and
      in
      taking all such action as may be necessary or appropriate to protect the
      Holder’s rights under this Article against impairment.

     

    
      
         

      

      
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    4.    Miscellaneous.

     

    4.1.    Required
      Consent.
      The
      Company may not modify any of the terms of this Note without the prior written
      consent of the Holder.

     

    4.2.    Lost
      Documents.
      Upon
      receipt by the Company of evidence satisfactory to it of the loss, theft,
      destruction or mutilation of this Note or any Note exchanged for it, and (in
      the
      case of loss, theft or destruction) of indemnity satisfactory to it, and upon
      surrender and cancellation of such Note, if mutilated, the Company will make
      and
      deliver in lieu of such Note a new Note of like tenor and unpaid principal
      amount and dated as of the original date of the Note.

     

    4.3.    Legends.
      This
      Note and any Common Stock or other securities issued upon conversion of this
      Note and/or conversion of any accrued interest hereon shall be imprinted with
      a
      legend in substantially the following form:

     

    THIS
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
      SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER STATE SECURITIES LAWS AND
      MAY
      NOT BE SOLD OR OTHERWISE DISTRIBUTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
      RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE ISSUER
      THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND LAWS.

     

    4.4.    Benefit.
      This
      Note shall be binding upon and inure to the benefit of the parties hereto and
      their legal representatives, successors and assigns.

     

    4.5.    Notices
      and Addresses.
      All
      notices, offers, acceptances and any other acts under this Note (except payment)
      shall be in writing, and shall be sufficiently given if delivered to the
      addressee in person, by overnight courier service or similar receipted delivery,
      or, if mailed, postage prepaid, by certified mail, return receipt requested,
      as
      follows:

     

    
      	
              To
                the Holder:

            	
              To
                the Holder’s address on page 1 of this Note,

              Attn.: Roy
                Harel, Manager

            
	 	 
	
              With
                a copy to:

            	
              Kantor,
                Elhanani, Tal & Co. Law Offices

              74
                -76 Rothschild Blvd. 

              Tel-Aviv,
                Israel 65785

              Attn: Dana
                Yagur, Adv.

            
	 	 
	
              To
                the Company:

            	
              To
                the Company’s address on page 1 of this Note,

            
	 	 
	 	
              Attn: Gilad
                Gat, Chief Executive Office 

                
                and President

            
	 	 
	
              With
                a copy to:

            	
              Davis
                & Gilbert LLP

              1740
                Broadway

              New
                York, New York 10019

              Attn: Ralph
                W. Norton, Esq.

            


    

    


    
      
         

      

      
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    or
      to
      such other address as any party, by notice to the other parties, may designate
      from time to time. Time shall be counted to, or from, as the case may be, the
      delivery in person or five business days after mailing. 

     

    4.6.    Governing
      Law and Jurisdiction.
      This
      Note will be deemed to have been made and delivered in New York City and will
      be
      governed as to validity, interpretation, construction, effect and in all other
      respects by the internal laws of the State of New York. Each of the Company
      and
      the Holder hereby (i) agrees that any legal suit, action or proceeding arising
      out of or relating to this Agreement will be instituted exclusively in New
      York
      State Supreme Court, County of New York or in the United States District Court
      for the Southern District of New York, (ii) waives any objection to the venue
      of
      any such suit, action or proceeding and the right to assert that such forum
      is
      not a convenient forum for such suit, action or proceeding, (iii) irrevocably
      consents to the jurisdiction of the New York State Supreme Court, County of
      New
      York and the United States District Court for the Southern District of New
      York
      in any such suit, action or proceeding, (iv) agrees to accept and acknowledge
      service of any and all process that may be served in any such suit, action
      or
      proceeding in New York State Supreme Court, County of New York or in the United
      States District Court for the Southern District of New York and (v) agrees
      that
      service of process upon it mailed by certified mail to its address set forth
      in
      Section 4.4 above will be deemed in every respect effective service of process
      upon it in any suit, action or proceeding. 

     

    4.7.    Section
      Headings.
      Section
      headings herein have been inserted for reference only and shall not be deemed
      to
      limit or otherwise affect, in any matter, or be deemed to interpret in whole
      or
      in part any of the terms or provisions of this Note.

     

    4.8.    Interpretation.
      Whenever possible, each provision of this Note shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      of this Note shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective only to the extent of such prohibition or
      invalidity, without invalidating the remainder of such provision or the
      remaining provisions of this Note.

     

    4.9.    Assignment.
      All
      rights of Holder under this Note may be assigned by Holder to any third party
      and all rights of Holder hereunder shall inure to the benefit of its
      transferees, successors and assigns.

     

    4.10.    No
      Rights as Stockholder.
      Until
      the conversion of this Note or conversion of any accrued interest hereon, the
      Holder of this Note shall not have or exercise any rights by virtue hereof
      as a
      stockholder of the Company.

     

    4.11.    Restatement.
      This
      Note is an amendment and restatement of the Convertible Promissory Note dated
      as
      of May 10, 2005, issued by the Company to the Holder and shall in all respects
      substitute for such note. As of May 10, 2008 the accrued and unpaid interest
      on
      this Note is $64,000.

     

    ******

     

    
      
         

      

      
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    IN
      WITNESS WHEREOF, this Note has been executed and delivered on the date specified
      above by the duly authorized representatives of the Company and the
      Holder.

     

    
      	 	GSV,
              INC.
	 	 
	 	 
	 	By:	
              /s/
                Gilad Gat

            
	 	 	
              Gilad
                Gat

              Chief
                Executive Officer and President

            
	 	 	 
	 	 	 
	 	Accepted
              and Agreed:
	 	 	 
	 	D.
              EMERALD INVESTMENTS LTD.
	 	 
	 	 
	 	By:	
              /s/
                Roy Harel

            
	 	 	
              Roy
                Harel

              Manager

            


    

     

    
      
         

      

      
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